SG Equipment Finance

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With 100 offices in 25 countries SG Equipment Finance, the specialist division of French bank Société Générale, is one of Europe’s largest specialist asset financiers. It offers business jet and helicopter finance ranging from $2 million for turboprops and helicopters up to large business jets of $35m, with the average deal size between $7 million to $10 million.

With 100 offices in 25 countries SG Equipment Finance, the specialist division of French bank Société Générale, is one of Europe’s largest specialist asset financiers. It offers business jet and helicopter finance ranging from $2 million for turboprops and helicopters up to large business jets of $35m, with the average deal size between $7 million to $10 million.

Although the bank will consider most deals – including new and pre-owned aircraft – it looks for assets it understands and good credits. “The structure of the deal, risk profile and the purchase rationale should make commercial sense,” says Paul Walsingham, manager, aircraft finance, SG Equipment Finance, based in the UK. “When you focus on one market you know you may miss out on some opportunities, but one of the lessons from the downturn is that things go wrong for banks when they stray from markets and terms they understand. In good times, banks may have been tempted to write deals on ‘relaxed’ terms and security to win business, but I believe many of these deals came back to haunt them in the downturn”

Walsingham says SG Equipment Finance’s consistent approach meant they continued to finance jets and helicopters on competitive terms throughout the recent downturn.

Most of the bank’s business jet clients are high net worth individuals but it also works with corporates. Although the bank does have a significant private bank arm, including SG Hambros in the UK, SG Equipment Finance actively looks to work with both, bank and non-bank clients.

“Whilst we are keen to support existing customers,” says Walsingham, “We are an asset financier first and foremost and are keen to work with good quality clients”.

Although it offers business jet and helicopter finance from most of its offices it has 16 aviation finance centres across Europe with Philippe Foulon, based at the head offices in Paris, responsible for the overall management and development of the business.  Germany, Switzerland, UK, Norway, Czech Republic and Poland are the bank’s most mature business aviation markets with the US, Italy, and Brazil, as the most recent but rapidly growing centres.

The German team, led by Stephen Grubb and Jochen Reichmann, is the most experienced, having been financing business aircraft since 1987. SGEF’s Norway aviation finance team, headed by Sverre Solem, is particularly active with helicopter finance for corporate operators and SG also has a commercial aviation division based in Paris. SG, therefore, has expertise across most segments of the aviation industry.

Walsingham says that the regional offices, like his UK one, benefit from truly understanding the market and have strong contacts with operators, lawyers, tax experts, appraisers, insurers and advisers, putting clients at ease and making the deal process happen smoothly.

He has worked at SG for nine years mainly in vendor finance, where manufacturers work closely with the banks and believes there are opportunities for aircraft manufacturers to work more closely with financiers. “Most manufacturers outside aviation have formal structured relationships with financiers to enable them to sell equipment and close deals much more efficiently. As an ex-Development Manager at RBS, GE and SGEF, there are many vendor models and relationships I have helped create with manufacturers in the past and this approach could well work in business aviation.”

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